Ending leases, and bad law

15/10/2019

I have been a commercial property lawyer since 1987, and last week was the first time I have seen an article about a lease termination on the front page of the BBC web site BBC report on Amazon case.  You would expect nearly everything in the world to be more interesting, even if the tenant was Amazon.   But it has highlighted the need to take care when ending leases, and that bad law in Scotland lasts for a long long time.

In Scotland a lease does not just come to an end when the lease says.  Either the landlord or tenant has to give a notice terminating it.  There are special provisions for agricultural and residential leases that I am not covering here.  Traditionally, under very old common law, the usual period of notice was 40 days, and the notice could be quite informal.  Then in 1907 there were changes in court procedure, and if one wanted to use a particular type of action to remove someone from property they had to use specified forms of notice.  As well as being badly drafted in other respects (e.g. apparently you could only terminate a lease on 2 specified days in a year) there was no mention of whether the old common law could also be used to end a lease. 

Under that Act if the property was larger than 2 acres a year’s notice had to be given.  In the Amazon case only 6 months’ notice was given.  Amazon refused to vacate and argued that the 1 year period applied.  The courts confirmed that the 1907 Act did not abolish the old common law way of terminating a lease, and so the notice was valid.  There is so much money involved that there may well be an appeal.  The result was a relief to me – a few weeks ago I was giving a talk on this topic to other lawyers and this is what I had said the law was!  The case highlights why the cautious approach is to comply with both provisions – paying lawyers to serve unnecessary notices is cheaper than litigation.

But why is the law so unclear and badly drafted?  A few years after the Act was passed it was clear there were problems with it.  More “recently” the Scottish Law Commission suggested solutions in 1989, and in their paper in 2018.   One strong argument for a Scottish Parliament was that there was just not enough parliamentary time in Westminster to deal with law reform, and the Scottish Parliament would have the time to improve Scots law, helping our people and making it something other jurisdictions would envy.  Look at the Scottish Law Commission web site Scottish Law Commission  to see how many reports and consultations have not been implemented, and look at what legislation has been passed by the Scottish Parliament  Acts passed by the Scottish Parliament. Surely our elected representatives can do a better job than this?